Got a smartphone? Retailers may be tracking you

It’s no secret that carrying a smartphone reveals information about where you are. As the phone pings cell towers so it can maintain a connection, its location is noted and logged.

Most smartphone users also leave Wi-Fi turned on, which lets them quickly connect to available networks and use less cellular data. But that practice may also be giving some retailers detailed information about what you’re doing in their stores.

The New York Times reports on retailers who are using a combination of shoppers’ Wi-Fi signals and video cameras to track customer behavior in their stores. It’s a real-life version of the concept used by websites to figure out how their users behave, and it’s got some customers rattled.

In fact, customer complaints about the practice are one reason why Nordstrom’s – which has stores in Houston – abandoned an experiment with shopper tracking in May, according to Times reporters Stephanie Clifford and Quentin Hardy.

“Way over the line,” one consumer posted to Facebook in response to a local news story about Nordstrom’s efforts at some of its stores. Nordstrom says the counts were made anonymous. Technology specialists, though, say the tracking is worrisome.

The stores are hiring businesses that specialize in customer tracking, and the technology used and approaches taken are sophisticated:

One, RetailNext, uses video footage to study how shoppers navigate, determining, say, that men spend only one minute in the coat department, which may help a store streamline its men’s outerwear layout. It also differentiates men from women, and children from adults.

RetailNext, based in San Jose, Calif., adds data from shoppers’ smartphones to deduce even more specific patterns. If a shopper’s phone is set to look for Wi-Fi networks, a store that offers Wi-Fi can pinpoint where the shopper is in the store, within a 10-foot radius, even if the shopper does not connect to the network, said Tim Callan, RetailNext’s chief marketing officer.

The store can also recognize returning shoppers, because mobile devices send unique identification codes when they search for networks. That means stores can now tell how repeat customers behave and the average time between visits.

Another company, Brickstream, uses an advanced stereoscopic camera that can separate adults from children. Some cameras can even tell the expression on a shopper’s face, allowing the retailer to guess at his or her mood:

For example, Realeyes, based in London, which analyzes facial cues for responses to online ads, monitors shoppers’ so-called happiness levels in stores and their reactions at the register. Synqera, a start-up in St. Petersburg, Russia, is selling software for checkout devices or computers that tailors marketing messages to a customer’s gender, age and mood, measured by facial recognition.

“If you are an angry man of 30, and it is Friday evening, it may offer you a bottle of whiskey,” said Ekaterina Savchenko, the company’s head of marketing.

Brick-and-mortar retailers who buy into these tracking services feel like this is necessary to compete with online competitors, who can glean large amounts of behavioral data using Web browser tracking. Stores can use the data to make changes to floor layouts or determine how many registers to keep open. They can also be used to offer coupons to shoppers who linger in one part of a store for a long period of time.

Of course, just as you can block cookies or opt out of online tracking, you can take steps to prevent physical retailers from learning about your behavior. You can turn off the Wi-Fi feature of your smartphone before you enter a store, or put your phone on airplane mode.

How do you feel about this practice? Is the benefit of a more convenient retail store worth your being tracked? Let us know in the comments.